The Costs of Preparing, Issuing, and Paying Purchase Orders, Plus

question 66

Multiple Choice

The costs of preparing, issuing, and paying purchase orders, plus receiving and inspecting the items included in orders is:

• A)purchasing costs
• B)ordering costs
• C)stockout costs
• D)carrying costs

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Definitions:

Cost Of Switching

The cost of switching refers to the expenses and inconveniences a customer or company faces when changing products, services, or suppliers, including termination fees, setup costs, and time.

Incremental Cash Inflow

Additional cash earnings a company receives from undertaking certain actions, such as launching a new product or project.

Net 30 Credit Policy

A payment term that allows a customer 30 days to pay the full amount on an invoice without incurring interest or penalties.

Monthly Interest Rate

The interest rate applied to a loan or debt for each month, often used to calculate the interest expense on outstanding debt for the month.